Personal Loans
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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How to Boost Your Odds of Personal Loan Approval

Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

There are a variety of reasons you might seek out personal loan approval. Maybe you’d like to pay off high-interest credit card debt or you need to replace your roof or handle some other major purchase. Unfortunately, there’s no guarantee you’ll get approved, but there are some ways you can increase your personal loan approval odds.

Where to find personal loan rates and terms from lenders

If you’re in the market for financial assistance and looking for personal loan approval, have a look at LendingTree’s top lenders’ loans with APR rates as low as 2.49% and amounts up to $50,000. With a personal loan, you can use that lump sum for a variety of purposes, including:

Keep in mind that personal loans are commonly unsecured. This means that while you won’t have to put any collateral down to be approved, if your credit score is less than stellar, your personal loan approval odds may be lower, and you might find yourself paying higher APR rates.

6 ways to boost your personal loan approval odds

If you’re struggling to get approved for a personal loan, it may be due to a variety of factors. Here are six ways you can tackle your next personal loan application and boost your odds of getting approved by a lender.

Check if you prequalify for a personal loan

Before you formally apply for a personal loan, you may be able to prequalify. Prequalification is an important feature to check for because it allows you to explore your loan options without affecting your credit score. This is called a soft credit inquiry which, unlike a hard credit pull, won’t impact your credit score. It’s a great way to compare multiple lenders before formally applying.

While requirements vary by lender, many of them consider similar criteria when reviewing your application:

  • Credit history and score
  • Current credit card balances
  • Credit utilization ratio
  • Income
  • Education and employment history

Improve your credit score

Your credit score helps lenders evaluate your creditworthiness or how likely you’ll repay your debt. The higher your credit score is, the more likely you’ll get approved for a personal loan. To improve or maintain your credit score, keep the following factors in mind.

  • Payment history: Lenders want to see that you have a history of making timely payments. Be sure to pay your mortgage, car loans, credit cards and other bills on time.
  • Credit utilization ratio: Your credit utilization ratio is how much credit debt you have divided by your credit limit. Most lenders prefer a ratio of less than 30% so if yours is higher, it’s a good idea to lower it by spending less and paying your balances off early.
  • Length of credit history: Generally speaking, the longer you’ve had your credit accounts, the higher your credit score will be. So keep old accounts open, active and in good standing if you can.
  • Credit mix: Having a variety of accounts open and in good standing can be good for your credit. It shows lenders that you can juggle different kinds of debt, from student loans to credit cards. However, there are two major types of debt: installment and revolving. Installment loans are repaid over a fixed schedule like personal loans and mortgages. Revolving credit like credit cards represent accounts you can borrow from on a rolling basis. Holding too much debt in revolving credit accounts can hurt your chances of loan approval, as it could signal to lenders that you don’t have a lot of cash flow.
  • New credit: Too many accounts and hard inquiries in a short amount of time can show that you’re a risky borrower. Therefore, you should only apply for and open new accounts when it’s necessary.

Not all personal loan lenders are created equal. Some may have more relaxed requirements than others, which is why it’s a good idea to shop around and explore all options. Your goal should be to find the best fit for your unique situation. If you have bad credit, rest assured there are lenders that may be willing to lend you money.

Review your credit reports and dispute errors

Before applying for a personal loan, you should know where your credit stands. Click here to obtain a free copy of your credit report from each of the three major credit reporting agencies (Equifax, Experian and TransUnion). Once you get your reports, take a close look at them to ensure they’re free of errors or inaccuracies.

If you come across accounts you don’t recognize, notice incorrect late payments or another mistake, you can dispute it. The process is free and the request can be made online, by phone or via mail. Disputing any errors and cleaning up your credit can increase your personal loan approval odds.

Practice healthy financial habits

In order to obtain personal loan approval, you’ll typically need a credit score of at least 600. However, generally speaking, a credit score of 640 or above may qualify you for the lowest interest rates and most favorable terms. If your credit score is lower than 640, you might want to focus on raising it before applying for a personal loan.

To help boost your credit score, make sure you pay all of your bills on time, every time. If you’re worried you’ll forget, enroll in automated payments or set calendar reminders on your phone. You should also keep your balances as low as possible, pay off debt and only open new accounts when you really need them.

Lock down a steady job or source of income

One of the factors that lending institutions consider is your debt-to-income ratio in order to compare how much debt you’ve taken on to how much money you’re bringing in. The lower your debt-to-income ratio, the more attractive your application will look to lenders.

Lenders also want to see that you have the funds to pay back the money you borrow. So if you’re unemployed, they may question your ability to pay the money back. Before moving forward with a personal loan, make sure you have a steady job.

If you are unable to work, you’ll need to show you have a consistent income source from government benefits, Social Security or retirement savings. In the event you don’t, your personal loan approval odds will go way down.

Consider a cosigner or joint applicant

In a perfect world, you’d have a high credit score and be able to get approved for any personal loan you apply for. If you’re already following the best credit practices and you still can’t qualify for favorable terms, you may need a cosigner or joint applicant to help secure the funds. When someone cosigns your loan, they’ll be on the hook for payments in case you default.

A joint applicant may be beneficial if you want to take out a larger loan and worry you won’t get approved because of your income or credit. With a co-borrower or joint applicant, they’ll apply for the loan with you and be equally responsible for repayment.

Cosigner vs. joint applicant: Key differences
  • Cosigner promises to repay the loan if you can’t.
  • Joint applicants share equal responsibility for repaying the loan.
  • Cosigner does not have ownership interest in what you do with your loan proceeds.
  • A joint applicant typically benefits from the loan.
  • Cosigners can allow you to qualify for a loan you may not be able to otherwise.
  • Joint applicants can help you take out a larger loan.

How to find a cosigner or joint applicant

  • The cosigner or joint applicant you choose should be someone you trust. If you’re taking out a loan to pay off high-interest credit card debt, for example, you may want to ask a friend or family member to cosign for you.
  • If, for example, you intend to use a personal loan to buy a boat with a friend, you may want to ask them to apply for it with you. You’ll both get to enjoy the boat, so a joint application makes sense.
  • If you opt for a cosigner, make it clear to them they’ll have to repay your loan if you are unable to. Show your cosigner that you have a stable job and/or steady income and are confident that you’ll be able to make your payments.

Personal loan pros and cons

While a personal loan may help you out of a tight financial spot, there are many factors to consider  before signing on the dotted line. Here are a few personal loan pros and cons to think about first.

Pros Cons
You can expect fixed monthly payments when you take out a personal loan, as opposed to other forms of credit such as credit cards. You may have to pay an origination fee which can range from 1% to 8%.
If you’re juggling various debts, you may be able to consolidate them into one personal loan. If you don’t have a good credit score, it may be hard for you to get personal loan approval as well as decent APR rates and loan terms.
With a personal loan, you can use that lump sum for various reasons, such as  paying for your wedding or covering an unexpected medical bill. Some lenders, such as Lightstream, may not offer prequalification services. If that’s the case, the lender will have to do a hard-credit pull to see if you qualify for the personal loan.

Personal loan rates

Below are the average APR rates you may see based on your credit score. Keep in mind, the better your credit score, the higher your average APR rate.

Personal loan APR rates by borrower credit score
Credit score range Average APR rate
720+ 10.73%
680-719 19.04%
660-679 24.74%
640-659 30.18%
620-639 37.09%
580-619 65.93%
560-579 102.36%
Less than 560 156.11%

Source: LendingTree customer data for Q1 2021.

Personal loan approval: FAQ

What credit score is needed for a $50,000 personal loan?

In order to qualify for a $50,000 personal loan, you’ll typically need to have a credit score of 600 or higher. However, those with a credit score of at least 670 (what FICO considers a good score) or 700 (what VantageScore considers good), may have better odds of not only getting approved but also finding better loan terms and APR rates. To learn more, check out our average personal loan rates and statistics.

What disqualifies you from getting a personal loan?

There are a variety of reasons you can be denied a personal loan, but some of the common factors include the following:

  • You have a low credit score.
  • Your debt-to-income ratio is too high.
  • The loan amount you requested is too high.

If you’re denied a personal loan, don’t give up — there are other lenders you can apply to that may have more flexible qualifications, especially if you have fair credit or bad credit.

How much time will it take to get my personal loan approved?

How long it takes to get your personal loan approved varies by lender. However, most lenders give you an answer fairly quickly, some even within a few hours of receiving your application. Many lenders will typically distribute your money in one to five business days.


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